George Vassos

The global low interest rate, low yield investment environment has prompted a number of new trends in the way that Australia’s largest institutional investors source and measure professional asset management services.

Omega Global Investors managing director George Vassos says larger investors are increasingly seeking discrete mandates that are co-designed in direct collaboration with investment managers, usually against specific risk parameters and target performance outcomes.

“We see a distinct trend has emerged whereby investment managers and large funds are talking directly to solve and co-create outcomes based solutions, often across multi asset class and risk parameters,” Mr Vassos said.

“This investment co-design trend speaks to a number of systemic industry responses as Australia’s growing asset pool looks for new sources of risk-adjusted portfolio returns. The underlying trend to in-source research and manager selection is part of this shift, and signals a welcome broadening and maturing of the institutional marketplace,” Mr Vassos said.

“A great example for our firm is that many people are surprised to learn we manage $1 billion in growth assets including a global listed infrastructure mandate, the parameters for which were not only based on our outcomes-based, risk controlled management style, but were co-designed around a portfolio of global growth assets at the outset with the client.”
Mr Vassos said the underlying trend was not a threat to traditionally intermediated manager selection processes, but denotes a renewed effort to explore more innovative pathways in the search for superior, risk adjusted return outcomes.

“Strategic partnerships look to remain a permanent fixture as institutional investors also seek to differentiate and diversify their asset allocation processes and we welcome the positive spirit in which the industry has embraced the growing trend,” Mr Vassos said.

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